House Republicans will release draft legislation Tuesday designed to rescue Puerto Rico from its crippling debt crisis by imposing an oversight board to audit the U.S. territory’s finances and put it on a path toward fiscal responsibility.

The “discussion draft” by Rep. Rob Bishop, Utah Republican and chairman of the Committee on Natural Resources, gives the House a starting point ahead of the March 31 deadline set by Speaker Paul D. Ryan to address Puerto Rico’s $70 billion plight.

Both sides of the aisle are picking through a draft that circulated around Capitol Hill over the weekend, and congressional aides say the legislation will change before the committee considers the bill in mid-April.

“The committee is continuing to work on a bipartisan basis to draft legislation that offers Puerto Rico tools to create positive change over its finances, meet its obligations and restore confidence in its institutions,” committee spokesman Parish Braden said.

The draft legislation urges Puerto Rico to reach voluntary debt-restructuring agreements with its creditors. As a last resort, the oversight board may authorize a petition for court-supervised restructuring, though it would not be allowed to file under the Chapter 9 bankruptcy mechanism that congressional Democrats had sought.

The five-member oversight board would operate within the Puerto Rican government but is not subject to the control of the governor or legislative assembly.

Commissioner Pedro Pierluisi, a Democrat who serves as the island’s non-voting House member, said the board is too powerful. He said the board should not be able to implement a fiscal plan without the local government’s blessing.

“While I doubt the board would ever exercise this power, it should not even have it,” he said in a lengthy statement on the early draft.

Mr. Pierluisi said the debt-restructuring provisions offer a promising start, however, and that responsible Puerto Rican leaders will work with Republican leaders to try to find a compromise that can become law.

But Puerto Rico’s current governor, Alejandro Garcia Padilla, said he’ll challenge in court any law that imposes an oversight board with powers to overrule local officials, according to the Associated Press.

Analysts say Puerto Rico’s woes are the result of years of over-borrowing and spending and the steady exit of young, working-age residents who could help turn around the island’s fortunes.

To keep itself afloat, the island is swiping money from pension funds and shifting funds dedicated to one pool of creditors to satisfy others.

Earlier this month, Senate Democrats filed a bill of their own that would set up a nine-member reform board and grant territory-wide powers to restructure all of its debt, saying Chapter 9 bankruptcy alone would only cover about a third of the debt.

Republicans, though, have rejected such proposals as a “bailout,” saying they don’t want to rewrite bankruptcy rules midstream to protect the island from its bondholders.

Democrats from the island are also pushing for middle ground.

Ricardo Rossello, a candidate for governor who is vying with Mr. Pierluisi in the New Progressive Party primary this year, said there is a “faulty” perception that Puerto Ricans are demanding bankruptcy or do not want to pay down their debts.

“Even though I’m a Democrat, I think we need to push this toward a more fiscally conservative approach,” he said between meetings on Capitol Hill last week.

He said the draft bill, however, does too little to spur economic development in Puerto Rico and imposes a “draconian” oversight board.

In his own proposal, the oversight board would be more of a “joint commission” between the federal government and island officials.

Meanwhile, the conservative Heritage Action group said it is still reviewing the draft legislation, though spokesman Dan Holler warned that “any bailout of Puerto Rico which includes changing the island’s bankruptcy laws should be avoided.”